Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: VAT RATES :: ACCOUNTING STANDARD :: form 3cd :: ARTICLES ON INPUT TAX CREDIT IN VAT :: Central Excise rule to resale the machines to a new company :: ACCOUNTING STANDARDS :: TAX RATES - GOODS TAXABLE @ 4% :: TDS :: cpt :: due date for vat payment :: VAT Audit :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: articles on VAT and GST in India :: list of goods taxed at 4% :: empanelment
« News Headlines »
 ICAI to organise two-day international conference in Hyderabad
 Here's how to calculate tax payable on your capital gains
 Income Tax calculations for the financial year 2016-17
 CPE Events 17 October - 22 October 2016
 High Court raps I-T Department for wrong tax demand
  CBDT signs 5 advance pricing pacts with Indian taxpayers
 Finance ministry warns tax officials of action against GST protest
 Big changes for small units under GST
 Parliament’s winter session to begin on November 16 to expedite GST rollout
 Income-tax (27th Amendment) Rules, 2016 - 92/2016
 Announcement - Clarifications in Respect of MEF 2016-17

CBDT scrutinising firms enjoying tax exemptions
September, 17th 2012

Companies availing tax exemptions are being scanned by the income tax department. The Central Board of Direct Taxes has started a closer scrutiny of companies paying less corporate tax due to various exemptions. The finance ministry says it has found some of these companies are evading taxes by shifting profits of a non-eligible unit to one in the exempted category.

Ministry officials said the tax department would identify the companies which have claimed exemptions when they were not eligible to do so and examine their books.

Some companies misuse exemptions and take undue benefits. The tax officer may look into details such as cost of raw material for a unit, power consumption and operational efficiency. The costs incurred by a unit in the exempted area should be compared with the one in a non-exempted area, said one official, who did not wish to be identified.

Earlier this month, Finance Minister P Chidambaram had asked the department to go after low tax-paying sectors to add an additional Rs 30,000 crore to revenue. Although the applicable tax rate for corporations is 30 per cent, he said some companies were paying even lower than the average of 24 per cent, due to various tax exemptions and deductions.

Several sectors are well below the average. In such cases, the average ranges from 10-22 per cent. Those are the areas I have asked them to focus onEven if the average is raised from 24 per cent to 26 per cent, we will collect roughly Rs 30,000 crore, Chidambaram had said. The minister, however, had clarified the exemptions would not be withdrawn.

Ministry officials said the average tax rate and collections would go up this year by plugging tax evasion and not by withdrawing exemptions. They did not, though, rule out the possibility of phasing out some of the exemptions in the next Budget, to be presented in February 2013.

Though the exemptions have come down at a broader level, in the Budget for 2012-13, exemptions were increased for certain sectors, said the official, adding some of the exemptions might be reviewed.

Power, research and development, skill development, residential houses and capital expenditure on specified businesses and health were some of the areas on which relief was provided in the 2012-13 Budget.

The official said revenue forgone this year on account of various exemptions was expected to be less than last year because of the economys slowing down, as well as closer scrutiny by the tax department.

The government had to forgo revenue of Rs 51,292 crore in 2011-12 on account of deductions to corporate tax payers. Units located in Special Economic Zones, charitable trusts and institutions, infrastructure facilities, telecommunications services, power generation and distribution companies, undertakings in the small scale sector, and housing projects comprised major beneficiaries from the deductions.

The ministry has set a target of collecting Rs 570,257 crore from direct taxes this year. Despite these collections in the first five months of the current year (April-August) coming to barely 22 per cent of the Budget estimate, the ministry is confident of meeting the target.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Application Management Solutions Application Management System Application Management Software System Application Management Development Application Management Software Development

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions